The phase-out of a medical tax offset in Tuesday’s budget could put popular specialist procedures such as in-vitro fertility treatments, orthodontics, optometry and laser eye surgery out of reach for some patients who have high medical costs.

The removal of the net medical expenses tax offset (NMETO), which depending on income amounts to 10¢ in every dollar for expenses above $5000, will save the government nearly $1 billion during the next four years.

Procedures that can now be counted towards the total amount of net medical expenses are some of the most popular and costly specialist treatments, and include aged-care expenses such as accommodation charges.

The staged abolition of the NMETO is one of the biggest savings in health in the 2013-14 budget. The government also said it would be raise the threshold of the extended Medicare safety net from $1221.90 to $2000, saving $106 million over four years. The threshold for those on concession cards of $610.70 will not change.

A spokesman for federal Health Minister
Tanya Plibersek
said the tax offset was not benefiting the right ­people in its present form.

“NMETO is poorly targeted. Individuals with high out-of-pocket expenses that do not have a tax liability gain no benefit whatsoever from this offset," the spokesman said.

“This includes the nearly 87 per cent of Australians over 65 who pay no income tax."

But
Sandra Dill
, chief executive of IVF lobby group Access Australia, said the changes to the tax offset in combination with an increase in the threshold for the extended Medicare safety net for out-of-pocket or gap expenses would make fertility treatment unattainable for many people.

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“Our concern is IVF may quickly become affordable only for the rich. It was a Labor government whose compassionate response to the plight of infertile people introduced IVF [Medicare] item numbers in 1990," Ms Dill said.

Some IVF treatments cost up to $10,000 with an average of $3500 covered by Medicare, Ms Dill said, and many patients had to use their credit cards to cover initial costs before they received their Medicare rebate.

Australian Dental Association federal president
Karin Alexander
said dental costs were often part of a broader package of care for chronically ill patients who would lose out as the tax rebate disappeared.

“There will be higher out-of-pocket costs without that sort of subsidisation from the government. It would be a pity if it is the people struggling the most that get hit," Dr Alexander said.

“They’re transferring monies to ­various other schemes but it just seems to be shifting money around, almost for the sake of shifting."

The tax offset will still be available for out-of-pocket medical expenses relating to disability aids, attendant care or aged-care expenses until July 1, 2019 when DisabilityCare and the government’s aged-care reform package begin.

National Seniors Australia chief executive
Michael O’Neill
said he expected a minority of older people to be affected.

“It will impact some seniors, but given it’s a tax offset, you really need to be earning a certain amount of income to pay tax. Potentially some self-funded retirees would be caught and those transitioning to retirement will be adversely affected," Mr O’Neill said.

“It is a relatively small amount. What I think we need to remember is the cumulative impact of health costs that is getting really difficult for people."

Consumers Health Forum chief executive
Carol Bennett
said the combination of both changes would lead to people putting off treatments.

“This is entrenching our culture of having one of the highest out-of-pocket costs for health in the world," she said.